These yards are India’s first recycling yards
to be certified based on E.U. standards.

India is home to one of the largest
shipbreaking facilities in the world with over 150 yards along its coast. On an
average, close to 6.2 million GT is scrapped in India every year, which
accounts for 33 percent of the total scrapped tonnage in the world.

The policy on E.U. Ship Recycling Regulation
mandates vessels under the E.U. flag to be scrapped in recognized ship breaking
yards. In the past four years, approximately 310 E.U. flagged vessels were
scrapped, out of which 107 were scrapped in India, amounting close to 4.3
million tons in deadweight.

The potential recognition of the yards by the
E.U. is anticipated to make them the preferred option for E.U. shipowners
despite the potential increase in costs required to meet higher health and
safety and environmental standards.

The E.U. Ship Recycling Regulation has
generated confusion, because it initially mentioned that beaching was not an
acceptable method. It was later that they clarified that each facility will be
verified individually and will not be disqualified purely on basis of method of
recycling followed or its geographical locations.

The potential E.U. ban on beaching could have
a most significant impact, said Dr Nikos Mikelis, non-executive director, of
cash buyer GMS. “Unfortunately, it is not the positive impact that some
commentators would lead us to believe. Two thirds or more of the world’s ship
recycling is still conducted on beaches in South East Asia, and improving the
working conditions and environmental impact of these yards is central to the
Hong Kong Convention.

“By preventing the progressive and more
CSR-savvy European market from using the Convention compliant yards in this
region, which is what a ban on beaching would achieve, the E.U. regulation
would torpedo the progress being made to improve the safety and sustainability
standards of recycling,” says Mikelis.

he E.U. Ship Recycling Regulation entered
into force at the end of 2013, and its requirements are phased-in between
December 31, 2015, and December 31, 2020. The list of recognized yards is
expected to be released in December this year.